In this article we are going to list the 20 largest European companies by market cap in 2020. Click to skip ahead and jump to the 5 largest European companies by market cap in 2020.
We are going to focus on what is probably the most developed continent in the world, and is the model that most countries are trying to emulate and copy across the world. Many countries in Europe, especially Western Europe, are often ranked among the countries with the highest standards of living and the happiest and most satisfied countries in the world, with the Nordic countries often leading the way in this regard.
While America is undoubtedly the world’s biggest superpower as evidenced by the fact that it easily tops the list of the 10 most powerful militaries in the world in 2020, and ostensibly every year before as well, it seems in many ways European countries are faring much better, and once again, I am discussing primarily Western European countries which are also rich and are considered to be among the developed countries in the world. However, these countries are nowhere near to being as capitalistic as the US and instead focus more on social welfare to ensure equal footing for all their residents and hence why they tend to have a much better standard of living and much less wealth disparity than the United States of America.
Even then, the European Union’s combined GDP is still less than that of the US at $18.3 trillion, which is a couple of trillion dollars less than the United States. However, this difference in mindset, culture and approach are only very small contributors to the fact that European companies are much smaller than those in the the US. After all, according to World Population Review, both the UK and Ireland have greater economic freedom as compared to the US. That is not to say that Europe has very small companies; some of their biggest companies have a market cap of over $200 billion in revenue and the combined market cap of the 20 largest European companies is well over a trillion dollars. However, compared to the US, they are still much smaller.
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One of the reasons behind this gap is the fact that even though the European Union has a population of over 500 million people, nearly 200 million more than the US, this population is divided into 28 countries with significantly different cultures, identities and languages. Then, there are several different currencies in use as well even though the Euro is used by most countries, other currencies such as Swiss Francs and krone are also used commonly. But perhaps the main reason behind the difference of company size in Europe and the US is due to the laws in both countries, with Europe having stricter laws which are overarching in nature, while the US laws are generally quite specific; for specific industries for example. Secondly, like I mentioned earlier, due to the methodology of wanting to spread wealth among citizens in Europe, taxes in these countries are a lot higher than the US, especially on large companies diminishing their size, though the added benefit is better infrastructure, public transport and universal healthcare just to name a few. One other reason is the fact European companies focus on margins to maximize profits while the US focuses on growth due to the large population and the large number of potential customers. But perhaps the greatest issue is the lack of funding available to European companies and the entrepreneurial mindset present in the US, which has seen the existence and boom of companies such as Facebook, Tesla, Twitter and many others worth billions and even over $100 billion. After all, there is a reason the American Dream is such a popular edit and has been for the last century, encouraging people to completely reform their lives and grow without any inhibition. Add in the fact that due to stringent labor laws in Europe, which aren’t as strict in the US, and you can figure out why the US has much bigger companies.
According to a report by leading services firm PwC, of the top 100 companies by market capital across the world, over 50 belonged to the United States of America, displaying the strength of the US in this department. Only 17 European companies made the list. These companies belong to a wide range of industries, from oil and gas to fashion and from food and beverages to the pharmaceutical industry. These companies also have some of the highest revenues in the world. The total market cap of just the top 20 European countries in June 2020 topped $3.2 trillion, even during the coronavirus pandemic which has ruined the economy of many countries, and as the second wave has struck Europe with renewed vigor right now, and lockdowns and restrictions are being imposed again, the industries may continue to suffer. After all, Airbus, which is the world’s largest aviation company and one of the 15 largest defence companies in the world, it is no longer in the top European companies according to market cap, as the airline industry has suffered catastrophically due to the ban of international and in some cases, domestic travel. Even after lifting of restrictions in a few places, many still do not trust traveling right now, and companies in the hospitality industry continue to suffer. If you compare the 10 busiest airports in the world in 2019 to that in 2020, you will find a drastic difference, illustrating the impact of the worst pandemic in a century, which has cost over 1.3 million lives and affected over 55 million people. Even now, there are over half a million cases every single day. So let’s took a look at the cornerstones of the European economy, starting with number 20:
20. Diageo
Total market cap as at June 30, 2020 (in billions of dollars): 78
Diageo is a British alcohol beverage company and is one of two alcohol companies in this list, signifying the affection that Europeans have for alcohol.
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